The U.S. trade deficit grew by 10.1 percent from April to May as U.S. exports declined and imports to the country grew.
The Department of Commerce reported Wednesday that the trade deficit in last month was $41.1 billion, $3.8 billion higher than April’s $37.4 billion trade deficit. Exports in May were $182.4 billion, $0.3 billion less than the month prior, and May imports grew by $3.4 billion, reaching $223.5 billion.
The presidential campaign of Republican candidate Donald Trump, who has railed against the trade deals and deficits, seized on the news Wednesday afternoon.
“The Obama-Clinton globalist trade policies continue to crush America’s middle class while enriching their donors. Millions of American workers are jobless today because of trade policies Obama and Clinton support. Hillary Clinton can try to hide her emails from the public, but she can never hide her record of economic failure and betrayal,” Stephen Miller, Trump’s senior policy advisor, said in a statement.
Excerpts from a Wall Street Journal article about the May trade deficit accompanied Miller’s statement, including:
The U.S. trade deficit widened in May as exports edged lower, reflecting soft overseas demand for American goods and services.
The trade gap rose 10.1% from April, the largest rise since August, to a seasonally adjusted $41.14 billion, the Commerce Department said Wednesday. Exports of goods and services fell 0.2% while imports rose 1.6%.
Economists surveyed by The Wall Street Journal had expected a deficit of $40.5 billion in May. April’s trade deficit was revised down slightly to $37.38 billion from a previously estimated $37.44 billion. The deficit had touched a two-and-a-half year low in March at $35.54 billion.
Overall, global trade has been subdued so far this year, reflecting muted domestic demand and anemic growth in the U.S.’s trade partners. For the January to May period, U.S. exports are down 4.9% from the same period a year ago. Imports are down 4.7% over the same period in 2015.
Wednesday’s report highlighted how weak growth overseas has diminished trade partners’ appetites for U.S.-made goods. Several headwinds remain. The dollar has once again strengthened in recent weeks, both in the lead up to and the wake of the United Kingdom’s vote to leave the European Union, renewing concerns among manufacturers that the exports will suffer again. The Brexit vote also sparked more uncertainty about growth in the E.U.
Several economists said that left the trade outlook less rosy for the second half of the year, and trade would likely drag slightly on growth. Economists at Barclays estimated that softer foreign demand for U.S. exports over the next six months would subtract a half-percentage-point from GDP growth, due to slower growth abroad and uncertainty following the U.K. referendum vote.
May’s report showed ongoing weakness in demand for capital goods both in the U.S. and abroad. Both exports and imports of capital goods fell by just under $1 billion each in May. That is one more sign that business investment is still not on its way back, a concern of policymakers at the Federal Reserve.
Imports of consumer goods rose by $1.3 billion in May, and imports of services were the highest on record, at $41.44 billion. Roughly half of those imported services were travel and transport, suggesting the strong U.S. dollar has spurred many Americans to spend time abroad.